SMB Loan Relief OptionsRainey Law Continues to Serve Clients (with the help of technology)

Governor Kevin Stitt recently signed an order declaring legal services as an essential business. Our team at Rainey Law continues working with full remote access capabilities from home and with limited personnel in our physical offices to ensure the health of others and our team.  We welcome calls, emails, video conferences, and if necessary, can accommodate in-person meetings while complying with all CDC recommended safety measures.

Small Business Loans (may also apply to sole proprietors, self-employed, independent contractors, and nonprofits).

Under the recent Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), small businesses have emergency loan programs available that might provide relief from Coronavirus related challenges.

We provide a brief summary of some of the loan programs in case you are facing Coronavirus related challenges:

Paycheck Protection Program

· This program provides business with potentially fully or partially forgivable loans equal to the lesser of $10 million or the sum of 2.5 times the average monthly payroll cost in 2019 (including the cost of paid sick leave, health care, and other benefits) for any permitted use, including but not limited to payroll, paid sick leave, mortgage payments, rent payments and service on existing debt.

· The interest rate on these loans is capped at 4% and the loans are 100% SBA guaranteed. All annual or guarantee fees and all prepayment penalties are waived. In addition, no personal guarantee or collateral is required.

· Any portion of the loan used to make payroll, pay for utilities, rent, mortgage and existing business debt is forgiven if the business’ employees remain employed through the end of June 2020. Businesses that have let employees go before accepting the loan can receive additional credit to cover wages if the employees are rehired.

· Applications for Paycheck Protection loans will be available from SBA approved lenders.

· Visit this article by Intuit to find a summary of the program and more details on what documents you will need to apply.

Economic Injury Disaster Loans

· Disaster Loans are available to businesses with less than 500 employees (now including non-profits, sole proprietors, and independent contractors).

· Disaster Loans can be approved by the Small Business Administration based solely on an applicant’s credit score.

· Disaster loans smaller than $200,000 can be approved without a personal guarantee.

· Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.

· Applications for disaster loans should be submitted to the Small Business Administration.

Loan Forgiveness

· Under the CARES Act, small business loan borrowers may be eligible for loan forgiveness (partial or full), both for new loans under the Paycheck Protection Program and for existing 7(a) loans.

· Forgiveness criteria is based on the type of loan utilized.

· The amount forgiven is not considered taxable income to the borrower.

The above is based on information and resources provided by the U.S. Chamber of Commerce, and should not be considered legal advice, as each business’ situation is different and should be reviewed. More information regarding the above can be found at the U.S. Chamber of Commerce’s website and the U.S. Small Business Administration website.

We know this is an unprecedented time for small businesses and our team at Rainey Law is here to support you should you have questions regarding the above relief options or related issues. Don’t hesitate to call us at 405-753-1555 or email us at